for jordan's assistance for the mutual assistance treaty but have also made clear to him that we are happy to give further assistance from the u.k. if the jordanians ask for it. >> sir peter tapsell. >> on egypt may i acquaint my right honorable friend with the news that when i arrived as a national serviceman in the charming town of sirs be 64 years ago, its townspeople were busy rioting against the -- [inaudible] party. in 64 years from now, i have little doubt that the egyptian people will still be rioting. so may i make the constructive suggestion to the foreign secretary that there's little that he can do to help except by not sending in british troops to restore order.

[laughter] >> right. i can assure my right honorable friends that i have no plan to send in british troops to restore order. the only time since the second world war we've sent british troops into egypt, i do recall my right honorable friend once was an election assistant to anthony eden. >> [inaudible] [laughter] >> it does, indeed, bear out the wisdom of experience. but we will not be doing that. and, of course, we have to stress that what we're calling for, the vast majority of what we're calling for can only be brought about by egyptians. we must not pretend anything other than that. but what we say and what other countries say does matter. how we're prepared to help in the future does matter. and we have to make those things clear to the egyptians even though it certainly doesn't involve the deployment of british troops. >> it is clear that the foreign secretary was familiar with the right honorable gentleman's cv

in 1955 as well as, i'm sure, his activities 64 years ago. mr. jack straw. >> mr. speaker, thank you. contrary to the distinguished but dismal prognosis of the father of the house, would the ec tear of state -- secretary of state accept that across africa there has been remarkable progress to produce democracies. bun of the things that's going to set that back is if the west appears to be critical about results of elections? this was a military coup. we will gain nothing, and it undermines our influence if we do not accept that. and if we don't accept it, we will simply feed those extremists on the islamic side who believe that we regard democracy as an optional extra only when the people elected are people we approve of. >> very, very good. >> i have a lot of sympathy with those points. half of the fastest-growing, half of the ten fastest-growing

economies in the world are now in africa. there's economic success, and there are many democracies becoming established. that's something to be welcomed and respected. and so we should be clear that's why i was clear on wednesday night last week, the united kingdom does not support military interventions in democratic politics. and we should always be prepared to state that very clearly, i think, and to state what i was just saying in answer to the shadow foreign secretary. the muslim brotherhood must not be driven out of democratic politics in egypt or any other country. and so i think across the house we can uphold those things very strongly. >> martin -- [inaudible] >> i welcome the foreign secretary's statement. the faltering peace process remains the best hope for the people of syria can, and if as he says iran is implicated in that conflict, isn't it now really essential to reach out to the new regime of dr. rouhani in iran and involve them in the peace process for syria, including geneva too?

to do otherwise is beginning to look unhopefully dogmatic. >> he's like about the importance of iran given iranian intervention on syria on such a scale. the extent to which they can be involved in a peace process will be heavily up to them. they have not hitherto supported the express support for the outcome of last year's geneva conference, the creation of a transitional government with full executive authority. and without agreeing with that, it's very hard to see how a success can be made of participation in negotiations over the coming months. but, of course, those negotiations have to be in circumstances that will produce the maximum success. a judgment about iran's -- how iran is involved in that must, therefore, be guide by that objective. >> mr. peter hane. >> can i welcome his commitment to that any decision to either

arm the opposition or intervene militarily will be put to the house on a substantive motion, but can i ask that that happens not -- or can i ask whether he intends that it happens not as in libya, after that decision has been activated, but before the activation of any such decision? >> be well, that is clearly the intention of what i've said. i don't think, i don't think it's right to compare this with libya or to ever to be able to give a 100% guarantee. after all, in libya we acted very urgently to save lives. with armored columns advancing on benghazi, we would not have been able to take that action with france had we then waited however many hours to call -- >> we're going to cut away from this recorded program and take you live now to a discussion with russia's ambassador to the u.s. and obama administration officials. they're previewing the upcoming

g20 summit that takes place in st. petersburg, russia, in september. live coverage underway right now here on c-span2. >> so we don't disrupt the speakers. we have started a tradition of doing events like this ahead of these big summits. the g20 is the biggest of them all in the world in the area i work on. it will be held just after labor day in st. petersburg, russia, and we normally would do this two or three weeks out, but because of the summer holidays and everything, we thought we'd get an early start. so we are delighted to have a terrific lineup of speakers today which we'll get started with in just one second. we'll have, after our two keynote speakers, the russian ambassador and the u.s. sherpa, we will have two panels, one an expert panel and then a very short break, and then we're going to have a senior sherpa perspective on the g20 summit and the agenda thereon. so with no further ado, let me

introduce dr. john hamre, president and ceo of csis. please. >> well, thank you all for coming. dripping.o not see people a lot of water here these days. glad to have you here, and that's a very important dialogue we're going to have this morning, and i want to say thanks to all of you for it to t here. there are two forms of internationalism; structural, treaty-based internationalism and then consensus internationalism. we all though about structural internationalism in places like the united nations, imf, you know, where countries spend time developing a framework, a structure, and it becomes -- it's one of the dominant, certainly been characteristic of internationalism over the last 60 years. the advantage of it, of course, is that it's normative. you know, the next generation knows the things that are important because they have

grown up with institutions that shape the debate. but these institutions also become brittle over time, and they don't work as well over time. so there's a preference often with countries to use consensus-based international, coalitions of the willing, you know? just find people that agree with you, let's go off and do it. the problem is it's efficient, but it's not normative. it doesn't really carry over to the next big problem. well, this is what the international world community has been wrestling with, and in many ways was the impulse to create the g20. you know, the imf and the world bank and the u.n. weren't going to be able to keep up and cope with the crisis as it was unfolding when the great recession was starting in 2008, 2009. but, you know, what were the institutions that were available that were more flexible? the g8? well, the g8 is, you know, it's considered to be, it's a bunch

of rich white guys. certainly isn't considered to be representative of the broad community. but how do you bring a big community together? well, the international community chose to the create something, the g20. and i think it was enormously important in helping at a crucial time to give a sense of direction. southern nations still -- sovereign nations still had to implement things, but there needed to be some form and med to bring it -- method to bring it together and get some shared coherence. that's kind of the foundation of how we got here. but now we ask the question, where's the g20 going, you know? is it really going to be a normative structure over time? how does it do that? it's unclear. and part of that's the backdrop of what we're going to be dealing with today in this conversation. we're going to be thinking

together, people that have an interest, how do we find be shared purpose in an international way on such a complex problem and not fall into the trap of having it, you know, drift into a structure that becomes brittle over time, you know? is there legitimacy in this configuration? certainly, it's more broadly based than the g8 is, you know? but is it really, does it have, does it have command power,? so these are the kinds of questions. now, we're lucky one of the most skilled diplomats in the world is with us this morning. sergei kiss l yak -- kislyak is a longstanding friend, and we prevailed upon him to come, you know, obviously because russia's gown to be the host for -- going to be the host for this g20 summit, but also because of his personallal rent as a diplomat. he's, of course, been in

washington during some pretty choppy days. these have not been the easiest times to be the russian ambassador in washington. but he's handled it with skill and with enormous strategic insight, and we're very fortunate that someone like him is here now. this is not the best of days in our relations with each other, but it's made dramatically better because of his presence and his ability. so would you, with your applause, please welcome the honorable sergey kislyak. in. [applause] >> thank you, john. and thank you for that kind of presentation, but i always feel a little bit oversold and that certainly -- [inaudible] and i was invited to make a welcoming address. now i am upgraded to keynote speaker. i thank you for that. however, i was thinking how different my speech would be and what's the difference between

welcoming and keynote. and in my view, both something that have to help you to understand what is russian view on the organization that we are discussing. several points. one, this is one of the youngest multilateral mechanisms that is addressing the problems that are unifying us all. and probably it's one of the institutions where russia and the united states, however being on different positions on many other issues, work very much together. finish -- so being in the same economic crisis both united states, us and the other countries brought us together into mechanism that may be short of being a directorate or a

normative setting has formed a mechanism where people can discuss and reconcile national strategies in the multilateral world with very intertwined economies. and as such g20 as far as i understand has proved to be rather efficient. i'm not suggesting that it was able to resolve all the issues of the crisis, but being upgraded wasn't with created until 2008. it did exist prior to that in somewhat more working formats, but in 2008 there was a decision made in order to have it on the level of the leaders, and that creates a kind of normative character to the whole kind of consensus that can be achieved with these mechanisms. russia being a country that has integrated in the world economy also recently, only 22 years

that we are integrateeded part of the -- integrated part of the world market. that peens for us that we have -- that means for us that we have high stakes in the vitality and the health of economic relations in the world. we are interested in seeing that the international trade -- [inaudible] would be favorable for us as well. we certainly also depend on the markets outside russia for well being russia, being an important exporter of things. and for us being in the chair of this organization adds a pretty unique opportunity not only to help together with the others to form a consensus on the current issues, but also to be able to contribute to solutions looking through the optics of our own

problems and our own goals. the two main subjects that we have proposed for the g20 summit this year a sustained growth and creating jobs. they are not necessarily new to the agenda of the g20. but the focus on this issue is very important because especially focusing on how best to achieve that kind of strategy. certainly, the national solutions and the national strategies will be decided by each and every country. but the way to reconcile it is to talk about in this issues in the 20, and i think currently you do not find another area that would be with as usable for that kind of stuff as g20 taking into account the composition of the countries that are involved. i would also like to say that

russia currently enjoys pretty solid economic situation in relative terms though. with the average growth rate in the world is about, what, 3.2%, russia enjoys 3.4. is it enough for us? no, of course not. we want it much higher. we had it before the crisis, and we hope to be able to restore it in the future. but at the same time, it's still solid, and we hope it will be on increase within years to come. we still find increase of job base. we have an ambitious plans within years to come to create additional 25 million jobs that may restructure old jobs and creating absolutely new. all of this requires a lot of

investment. so the creation of environment for the investment is also one of our national priorities. currently, the climate for investment according to international ratings isn't among the top 20, i would say, but i wish we have a chance to get in the same kind of format in five years. i bet we will be in the 20. we are working hard on creating conditions in russia that would be considered by other outside investors as good as in 20 best countries in the world. but even today i think our investment climate is very much underrated, and we are doing much better than some of late. at the same time, also when it comes to russian economy we have enjoyed previous -- [inaudible] fiscal environment.

we have accumulated significant reserves. we have two funds, one sovereign fund which is about 40 -- $84 billion and another reserve fund that is another $80-miss -- $80-plus billion. and the national reserves are 500 plus billion dollars as well. we are almost debt-free country because our external debt is no more than 2.5% and including internal debt is around 10, 11%. if you compare it with the g8 countries and with the country that hosts us today, i think we are doing in relative terms significantly better, and we have rather -- [inaudible] on how to further.

so for us g20 is a very important member i didn't mean where we will try to harmonize in ways that would be advancing our national goals and also being part of the international community working on overcoming the remnants of the crisis because we stand to benefit from the healthy international economic environment as any other g20 country and many others. so currently the chairmanship of in this organization brings a lot of additional work for russia, but we like it because it gives also us an opportunity to invite the best specialists on all the economic issues of the current situation, financial, job creation

specialists. in a week, plus or minus, we are going to have pretty unique forum that will bring together ministers of finance and ministers of labor of the g20. that is pretty unique forum as far as we understand. that will give them a chance to discuss what can be done to address the priorities that we have. so g20 is going to be a significant event in the economic discussions in its own right. it will be an important event for us because of our involvement in preparing it. and i hope it's going to be another confirmation that there are issues in the world where we all stand to benefit more by working together rather than working against each other. and economics today is one of these areas. thank you. [applause]

>> thank you so much, mr. ambassador, for those very helpful comments to give us a good overview of the backdrop to this summit. one of the hazards of inviting a speaker from the white house is that they tend to get a little bit delayed, and we have a combination of traffic as well. i'm told that caroline atkinson is two blocks away, so if everyone could just be patient for about, hopefully, one or two minutes, we will have caroline atkinson with us, and then we'll move on with the rest of our program. so, please, stay in your seats if you you can or get a cup of coffee, and we'll be right back. [inaudible conversations]

[inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] knox. [inaudible conversations]

>> so we're waiting for caroline atkinson, the deputy national security adviser for international economics, to arrive. this is a live discussion with russia's ambassador to the u.s. and obama administration officials. they're previewing the upcoming g20 summit that takes place in st. petersburg, russia, in september. the g20 summit gathers officials from the world's largest economies for meetings on economic and financial issues and promotes international financial state. president obama also expected to attend that suspect gathering, and our live coverage will continue this morning here on c-span2. [inaudible conversations]

[inaudible conversations] [inaudible conversations]

[inaudible conversations] >> okay, folks, if we'd take our seats again. okay. welcome back. hope everyone had a chance to get a cup of coffee. so i am just delighted to introduce the first of two former bosses participating in to today's program. caroline atkinson is the deputy national security adviser for international economics at the white house. she is an old colleague and friend of mine and boss, twice, and she has actually been at the white house for a couple of

years working on a range of international economic issues, all the important ones including the g20 which she has now inherited as the sherpa for the united states, that is the president's premiere or adviser on this important summit. she has a very long and distinguished career in international finance at the bank of england, at "the washington post," at the times of london and, of course, at the u.s. treasury department where we worked to the a number of years -- together a number of years ago. and importantly, her biography says she was born in washington d.c. like me, that's also true. we have parents of british origin, but unlike me her parents were wise enough to spend enough time in the u.k. that she picked up that wonderful accent and i, unfortunately, did not. but you'll see in a second. so with that, caroline, please join us, thanks.

>> thanks very much, matt. yes, it does require a little bit of explanation when i show up as president obama's sherpa and, in fact, the g8 david cameron said i've been wondering who side you're, you know, you're really on. [laughter] anyway, it's a pleasure to be here in this morning, and i wanted just as i was explaining to our russian colleague that i was just meeting with my russian sherpa counterpart, so we concern he said, well, that's why she's not here, and i said she's why i'm late. and i think that goes to part of what is so valuable about the g20. i should declare an interest because when matt and i were working together at the treasury department, it was the birth of what became the g20. with the asian crisis in the late '90s, it was clear that there wasn't really a right grouping of countries to discuss the important issues that that

crisis revealed. and the traditional g7 in those days was too heavily dominated or just consisted of the advanced and big industrialized countries. but the crisis was going on in a part of the world that was really underrepresented in those groupings. and i think it was singapore, then singapore leader who suggested to president clinton that there should be some meeting of officials and senior officials and ministers to discuss these important issues in a more global context. and president clinton charged bob ruben and larry summers who subsequently charged me with putting together what was then the g20. i think the first meeting was called the willard group. and in those days it was extremely difficult to figure

out as we were developing which countries -- obviously, indonesia, obviously russia, brazil, turkey -- we didn't have counterparts that we clearly and usually were in contact with, we the united states. .. that was the worst thing that could happen but we discovered that it could be worse with the whole globe starting in the u.s. and we realized that the g20

brought together the countries that needed to be at the table when you had a global economic problem that required cooperative and coordinate action. and missing at the leaders level really helps to promote the breakthroughs in london 2009 that were so important for helping to pull the global economy back from the brink of the worst recession since the second world war, but it could've been the worst depression. so at that stage i think the g20 kind of proved itself in those early days. it proved itself as a way that you could get leaders focused to drive up or economic institutions to take the kind of action that was needed and to understand the spillover from one country to another. since then of course things have

changed a lot and the g20 has a new and not less acute but complex challenge now i think, which is how to deal with more chronic issues of a need for coordination. my personal view and the view of my government and my president is that the g20 remains extremely important. it was sort of dubbed the premier economic forum after 2008 and 2009 for global economic coordination and debate. and i think it remains that but the problems that we now face are not the acute ones in the financial crisis. they are more chronic ones of still too slow recovery from the crisis, still too high unemployment in many countries including here and we still face

the issues of how we can work together so that our economic policies are supported within the framework of a sustained, balanced and strong growth in a way that we can understand each other. now in the past couple of years, as many of you will know, these summits have tended to be a bit dominated by an acute crisis, again not the global crisis but the european crisis and my first g20 summit in this kind of role in the white house dominated what was happening with the first quarter referendum and so on. in los cabos, it was another interesting moment for the g20 because although some of the emerging markets sometimes feel well, we don't get to discuss what the big countries do and we

won't have a voice in their policies if they affect us. i think that really happened in mexico and if you go back and look at the state you will see that the europeans who at that stage in the crosshaircrosshair s if you like or the crisis really put on the table some important steps that they plans to take and of course after the gym in los cabos summit there were important steps taken in europe that really lowered the temperature and help to provide financial healing. as we look at the agenda this year and we have the imf and i know david my former colleague will be coming later, we have the imf telling us all that the global outlook in the latest is worse than they expected and we expected. just recently, and i think that we in the u.s. are finding that

the recovery is perhaps a little stronger than was expected and there is healing going on but we still recognize we have work to do. if we look at the rest of the world almost everywhere other than japan interestingly enough, the outlook is more disappointing and not maybe the big downside risks but still with a lot of concerns that have been expected just a few weeks ago. so we think that the focus that leaders will want to focus on how we can really get this recovery on a steady and strong path. that is the big challenge for us and for us all in all of our countries. and i think that what has been happening in emerging markets just recently will also, yeah. will also put in extra interest

from the whole group on these basic macroquestions. last year as europe and it wasn't clear how quickly we were getting out of fire recovery and unemployment had decisively turns down and europe obviously was still struggling with a lot of difficult issues, emerging markets looked as if they could decouple and i think we have seen more recently that a lot of emerging markets remained concerned and it's important for the big not so industrialized countries to have that discussion around a table the table that includes all of the major economies and gdp about how the policies that we all carry out affect each other. that is not always an easy way, an easy conversation to have but it is a critical one because it helps us to understand how

things are in other parts of the world and that is true from everybody else's point of view. so there are other issues that over the years have been added to the agenda and i was just having a debate yesterday with one of my other sherpa colleagues who was saying really we should do it kind of back to basics and only worry about the global economy debate but i don't really agree with that because i think that part of the power of the g20 also is that these countries, if we make policy commitments they can have an important role in setting a global agenda and in affecting the global economy in a larger sense, not just the fiscal and current account deficits but other important areas. one is the important steps that the g20 has taken in recent years, which might seem not central to the global macrodebate that is enormously important in the world, was to

agree not to put on export bans for food products in times of shortage and that has been a really important -- though that helped a lot of countries to explain to their domestic audience is why they were not in times of shortage thinking of resorting to export bans and we know what from the imf and others have done that these export bans actually worsened the local -- global food process and is just an example the global world would any country desk and have a quick and immediate impact and that has led to quite an important development of the more transparency in agricultural pricing. there is a group that talks about that and promotes that which helps markets. another key area is trade. now we were saying and most of the g20, the g20 is not a place

to do trade negotiations. in fact in a way the sherpa's are the masters of all and of none. we don't really know them create detail about anything but we try to represent our leaders on a whole bunch of topics. so on trade for example what we can do is give a political push. two years ago in japan it was quite important that after years and years of repeating that we were going to complete the doha round very quick way, leaders agreed that it was time to look at fresh and credible approaches in order to revive the multilateral trading round and they also earlier had agreed to a standstill on protectionist measures. there was a piece in the newspaper i think yesterday about how protection was the dog that didn't bark. the fact that leaders were there and were able to come to agreement that they would resist

the temptation to put on protectionist measures despite the enormous challenges faced in their economy was one important element in helping to preserve the open trading system. and this year of course there has been a lot of focus especially in the u.s. and especially on the trade priorities of the u.s. and my predecessor mike furman with both the transpacific partnership and more recently the launch of transatlantic trade partnership and there is some question where is the world trading system going? i think the g20 consent also an important signal that we care about the wto and the maintenance and revitalization if you like of the wto, the multinational trading of trading rounds and we are very hopeful that in bali when the wto meets later this year it will be possible to reach an agreement around the package that views

the genuine value around trade facilitation. maybe a little further than that but it's a step forward rather than a repeat of discussions that have not been getting anywhere much. and that the trade area and the climate is another important area and energy security. these are all areas where traditionally there have been a sort of few that advanced economies were kind of on one side and emergent economies should be treated differently. i think as we have worked around the g20 table bilaterally and another groups it's clearer and clearer that the emerging major economies need to talk about these issues on a sort of, not that everybody is the same but on that basis where we recognize that we all have obligations.

this came up you would have probably seen in today's newspapers that discussion with china ,-com,-com ma a recognition that we need to have a joint climate plan. in trade, climate and other things with the major economies do in the emerging world is important for the international system just as with the big industrialized economies do. so, another couple of issues that i think have been very important that the g20 has championed. in the energy field in 2009 we called for phasing out a fossil fuel subsidies, wasteful fossil fuel subsidies and everybody could sign up to that and the next question was oh okay what is a subsidy and what is a wasteful one and a lot of debate about that. this year on the russian leadership we have been taking steps towards looking at a peer review may be involving some international institutions so

that there is more transparency and understanding about the need to act on fossil fuel subsidies. the imf did this great work in the spring showing this half a trillion dollars a year holding down the prices of fossil fuels which if you think we are the other part of our brains in some countries people are looking at ways to price carbon and to raise the price of carbon, at least you want to start off with not subsidizing it. but of course that is a very difficult political issue in many countries but it's one that we think we need to work on more and more, especially as the cost of these subsidies have become really really crippling for some countries on their fiscal policies. there are other issues, taxes where the g8 looks at tax policy internationally but really the g20 needs to be involved in that debate and we look forward to

that being one of the issues that comes up in russia as well. corruption, which a lot of people you know 10 years ago might have said that's not really an economic issue, we know it is an economic issue and it may not be, and may not be such an economic issue and work and business and so one in what was the g7 but it certainly was an issue as we think about cross-border investment and how to help promote development. the development would be my last point. in the old days the g7 and then the g8 would talk about development very much and we would invite leaders from the poorest regions of the world, africa and it would be very much and in fact you may remember that demonstration, very much a move from ngos and also from the countries the african or plural countries in the south to say the richer ones. you are rich, what are you going

to do to help us? and then the rich countries would try to push each other to do a bit more and be offering stuff. that debate is really changed in the g8 player last year and this year under the u.s. and u.k. presidencpresidenc y there has been a broader group of developing countries pull together and a very different debate where it's much more about what can we do together as partners? what can the poorest ones due to attract the kind of private capital that they need? we all recognize the game is not in aid. the game is in both trade and also private capital and domestic resource mobilization. and in the g20 i think it helped to push that, the recognition into the g8 and to also show that it's no longer what is the g7 giving to africa? we know that china's investment in sub-saharan africa is very

important and we know brazil has technologies that can help food production in tropical areas if they share those ,-com,-com ma so there is much more the kind of common interest in how this kind of sharing and mutual support can help to advance goals as different as both a development goals but also the original global economy ones and financial regulation and so on. and also through the help of areas that touch on how successful other international global and financial system can be for everybody. thank you. [applause] >> thank you so much caroline. just a breathtaking presentation of of the scope of the g20's work and her responsibilities which are fast and it's hard to see how one human being can cover all of that ground. we are going to talk more --

you do have help. what we do for sherpa's. caroline has time for a think a few questions so he do have a question please wait for the microphone which are floating and please identify yourself and please make the question short. thanks. down there, i see. if you can say who you are as you ask your question. >> my name is anna and i'm a reporter with reuters and i was wondering if you could speak a bit about some of the issues that are likely to come up at the next g20 meetings and especially fed policy. how you will respond to some of the concerns emerging markets have raised about spillover effects and other issues like that. thank you. >> i'm not going to get into fed policy. it's a simple rule for those of

us in the white house. i will just say that i think what's important and what we see is important is, and i think this is true for every country in the g20, that we need to bear in mind the importance of strengthening our own economies and then we need to strengthen our own economies and i pray that supports the global economy. certainly the focus of u.s. policy, we want to make -- and we took very dramatic steps early on in the crisis on our banking system, monetary policy and fiscal policy to hault the decline and promote recovery and of course what every country does affects every other country and that is something that the g20 provides a good forum for discussion. and the most sort of guiding light if you like at the g20 is

that countries should be mindful mindful -- countries should talk about what it is that they can do to reinforce a strong global economy. >> dubbert with georgetown. i know trade is something you only tangentially talk about but could you go a little bit further about what you are staying ahead for the next couple of years in terms of supporting the multilateral negotiation and in addition to all of the many many fta's but there must be a strong trade agenda coming up.

could you talk a little bit about what we will see and particularly in support for the multilateral? >> yeah. as we said we think the multilateral agenda is very important and that is why we have been putting in an enormous amount of energy into having successful agreement or successful negotiations in bali which will come after this year's g20. so what i would hope is that the g20 is able to provide some political support for such an agreement, centered around the corner of trade facilitation. there has been some quite interesting work done in geneva and also a lot of work. i think the oecd has calculated how measures on trade facilitation can help importantly all kinds of countries and possibly the support for trade and gdp is

even greater in developing countries where there may be more barriers for moving goods to market in a smooth and efficient way. so we think that is an important element of the multilateral trade negotiations. >> there has been a new focus on economic relations and u.s.-russian relations and the establishment of the -- of dmitri and joe biden and ambassador said some very important things about the russian interest in the global economy. you said you came from meeting in the g20 serpa. can you tell me if there is

anything particularly russian about this agenda like in the past? you have countries that really have a mark on it. is there anything that you see as important in terms of our own understanding of russia or the way the g20 should he shaped from a russian point of view? [inaudible] the ambassador spoke to that. i know ksenia is coming later so i would prefer to let them define what they see as the hallmarks from a russian perspective. all i would say is that of course every chair has a particular mark but at the same time every chair is responsive both to immediate events, so if you look at the los cabos summit that was in mexico there was actually a fair amount of detail as i mentioned about european economic policy as well as a number of other issues.

and then part of the point to the g20 is also that it is a global agenda so there's a balance always between the recognition of the global issues and the common issues and then the particular areas where the chair pushes. but i think it should be up to the chair to describe those. thanks. >> thank you very much for your remarks. with the upcoming -- oh i'm sorry. carol with blue star -- with the upcoming finance minister meeting do you see any room for discussion of getting beyond fiscal policy and labor market policy and job development since there is a huge job deficit? >> thank you. well i think that increasingly

we have been putting the issue of jobs and growth, growth and job creation on the agenda and in fact to russia this year made very clear that was one of the sort of key areas of focus for this year's summit and i think that it has only become more evident as the year has gone on. and, we fully support that. i also believe that the coincidence of the labor and finance ministers, you know they are having one day overlapping i believe and will have some outcome from that. it is particularly at the site this year. it's a very good year for that discussion to occur and i expect expect -- i am hopeful that there can be some progress in understanding. we also believe that once you

are talking about a growth strategy and not just you know as separate fiscal strategy and a separate macroone, in the end if you ask what the leaders and their people want and of course we can characterize growth in different ways. it is word inclusive but what matters is strong sustainable balance that we are all talking about the need for growth and improved living standards. thank you. [applause] >> thank you again caroline. that was terrific and again just a huge amount of coverage that she has to do there. i know having worked at the white house and spending one hour doing this is a big commitment so we really appreciate that. so we will now move straight onto our first panel which is a terrific lineup.

david shorr is going to moderates of the four panelists should -- can come up and take their seats, we will move straight into that. incidentally well they are coming up we are going to squeeze the brake. in fact we probably won't take an official break between this panel and the final one that you are welcome at any time to get up and get a cup of coffee or do whatever you need. thanks. [inaudible conversations]

[inaudible conversations] >> good morning everyone. thanks for being here. thanks to matt for setting things up and inviting us. we have an excellent panel, very well-informed experts to help orient us to the upcoming summit and we hope we all have our mike son. i just want to start off with a few scene setting points. if the g20's image has faded as a place where i think things get done, to a good extent it's a victim of its own success. if you save the global economy from cataclysm what do you do for an encore? that is its main problem and i

would say it hasn't always been clear what it's doing for an encore. i don't mean that as a slam. but i mean that as a constructive critique and that is what what i would like to have to keep in mind as you were listening to all the issues that the g20 is dealing with. you know the knock against the g20 is that it's trying to do too many things. but i think that misstates the problem. it is true that there are sort of a lot of things walking through and flowing through the g20's inbox but really for some of those items it's fairly passive. for others it's pretty much aspirational, and so really the point and i am picking up somewhat on what caroline atkinson said before, the point

isn't to focus exclusively on the top priorities but the point really is just to use the process well and by that i mean only deal with things where the leaders really can't advance things down the role, down the field rather, whatever the issue. so it's really about being clear if you will about the change. where are we trying to get and how? and that is the way that i would like to hear all of our experts talk about things. so, when the g20 wonks talk about streamlined communiqués and away what we are saying is the communiqués should merrily be clear in stating you know what it incidents are being ends that are being made on a given issue and in different ways.

so, as they say i am going to be asking what we are doing for an encore. as someone who has been an advocate for the g20 to do more to deal with more issues of wider range ,-com,-com ma as someone who has spoken up for the g20's affiliated not just the top-tier issues but with other issues as well and again i was delighted to hear caroline atkinson pick up on that theme. i do want to be clear as i turn now to mark sobel from the treasury department, we are all aware of what the top-tier is. there is no confusion with the core job of the g20 is. it has its three main marginal orders and i would like to hear an update on them. the macroeconomic imbalances and between export and consumer

demand, financial regulatory reform, the problem is too big to fail, that derivatives regulation and then what people i think sometimes forget is also the third pillar of the core of that agenda is international institution governance reform and there was an agreement for changes to imf quotas in 2010, so there are some follow-up issues on that. so if you could you know give us a bit of a snapshot on where we are with those? >> thank you. you would like me to address all of them in one fell swoop. as efficiently as i can. so, let me address your question against the background of the g20 finance ministers meeting next week in place in moscow. this will be the last finance commissioners meeting this year

preceding the summit in september. so let me just turn to the issues one by one. so, in terms of the global economy i think the background for the ministers discussion remains largely unchanged, so while tariffs have been avoided over the last few years unemployment is too high. it's quite simple. but in other ways the current situation has evolved. in the u.s. recent data show the recovery is well on track. domestic demand is going around 3%. labor market conditions are steadily improving and while headline growth of around 2% is being held back by large fiscal headwinds to gdp growth through the end of 2013 and into 2014, the fiscal deficit in the u.s.

and% of gdp in 2012 should drop to 4.6%. this year according to the administration's suggestions, the administration's forecast also show a declining debt-to-gdp path in 2016 the forecast horizon in and 2023. so the u.s. is meeting the fiscal commitments set forth in the 2010 toronto summit but frankly we are consolidating faster than is desirable to support our economy. the outlook elsewhere is more challenging however. europe remains a serious global risk despite global progress in building stronger firewalls. europe's recovery matters enormously to the united states but europe remains mired in recession. private demand is strong for eight consecutive quarters.

welcome agreements have been struck on back loading consolidation in some countries and some indicators have improved. still the outlook is highly clouded and fiscal policy remains -- and economic outlook continues to depend on net exports. within europe as you know there is a continuing strong pressure on the periphery to adjust by contraction rather than increasing domestic demand in large surplus. the short-term japanese outlook has been bolstered by economics. like others we are keenly interested in the third structural reform which is critical for lasting interim growth. it is important we operate to domestic demand. chinese domestic markets were impacted by -- that will lower credit expansion and growth.

asia's chronic surpluses and ongoing impediment to global rebalancing. am urging market growth was weaker. volatility and global financial markets has picked up lately. overall, he remained concerned that prospects of global rebalancing outside of the u.s. are discouraging. the u.s. cannot be the world's importer of first and last resort. on the international regulatory agenda, we see this as successfully moving forward. sorry, the international financial regulatory agenda. we see this agenda successfully moving forward with the united states leading the way. progress is unmistakable and today's regulatory regime is far more robust than during the crisis. the u.s. banking agencies have issued their final fossil -- basel ii .5 and three to

strengthen the quality and quantity of capital aroundhe world. further to that and the surcharge on globally systemically important banks has done so. u.s. banks are ready-made basel iii capital standards and the largest risk holding tank companies which represent more than 70% of total the total assets of the system have a common equity tier 1 ratio of 11%. we are also working in the u.s. on proposals to establish a leverage ratio above the basel iii required minimum and the combined amount of equity and long-term debt to facilitate orderly resolution. europe has just put in place its directive to include basel iii. it's important to adhere to the underlying basel risk related assets consistently across borders. progress has been made also in

cross-border resolution frameworks with the aim of helping ensure taxpayers never again have to bear the cost of the magnitude we saw. the fsb has put forward the attributes for effective resolution regimes which the united states is art implemented. the fdic's single point of entry approach will allow subsidiaries have failed globally systemically important banks to operate worldwide without interruption. europe is making progress through its bank recover and resolution directive. which sets forth a proposed deposit credit of hierarchy regime plus associated financing in brussels just proposed a single resolution mechanism for the euro area. so, another key aspect of the agenda that we have been discussing a place as the crisis is otc derivatives. the cftc has designated credit default an interest rate swaps.

they register some 75 swap dealers and launched trade reporting. we see others as behind. the crisis showed how destructive the risk of cross-border otc derivatives can be and close alignment globally is critical to regulatory gaps. yesterday the european commission and the cftc reached a significant agreement on a common path forward on derivatives to bring transparency and lower risks to the global swaps market. and progress has also been made recently in developing final international standards for marginal requirements for derivatives. the u.s. is also test going -- tackling the risk of shallow thinking and the recommendations for public comment to reduce the risk posed by money market funds and the sec has proposed regulations intended to do so. so, international reform agenda

is extensive but the key areas i have described, i think they showed robust progress is being made through the standard setting bodies and bilateral dialogues in a more resilient laval unnatural system. so, turning to architecture -- >> there is an issue i guess with congressional approval of the 2010 agreement. >> i am familiar with it. so, i think caroline outlined a lot of the issues that are on the table. there are quite a few issues in the international architecture

space with sustainable lending original financing arrangements, public debt management guidelines and the like so i want to make sure that the audience understands that there is a comprehensive agenda. i know that our russian friends are pursuing the agenda and i am sure our colleagues will be taking up any of these issues next year. now on the quota issue, this is a top priority for us. we are very focused on securing legislation. all of us are working very hard to do so and well we should. the imf is a great triumph in

international corporation and is a valuable organization. if anybody has read ben's style's recent book that just shows how integral and somehow we were in creating this just institution. it has really served the world's interests but our interests extraordinarily well. it contributed to post-war development and reconstruction in europe and asia. it has helped us deal with debt crises in the 80s and helped us deal with the transition of economies, bringing them into the system and the 90s. david lipton will be here and it's something that he and i worked very closely on, the great moment in history instrumental in tackling the emerging market crises of the

90s. >> and the governance reforms are basically just to catch up the governance system with the changes in the world. >> exactly. now, the fund is also the first responder in a crises. it always has been and as such it's very supportive of the u.s. interest when there are problems overseas. it's our economy that reduces our exports and good jobs in the u.s. economy. we have seen the financial instability abroad creating financial impacts which impact americans 401(k)'s. [inaudible] >> you're absolutely right. the united states supports

modernization of the imf and the government's reforms to reflect the growing realities of the growth in the emerging markets that remain something that we support in pittsburgh. we were very instrumental in drafting and brokering the agreement about increasing the share of dynamic emerging markets by five or 6% which was reflected in the 2010 deal. so currently has this been the case the u.s. is the largest shareholder in the imf buried we have tremendous influence in this institution and i think we need to preserve that leadership position. and the budget proposal that we submitted provides for doubling" of but it also provides for a reduction in the nlrb.

we are not putting a dollar into the fund budgets importing to move forward to the 2010 reforms and we are seeking to do so and it's important for the world and it's also important i think to protect u.s. leadership in the fund and its capacities to support a resilient economy. so my last sentence, the ministers will have plenty to talk about next week in moscow. >> never a problem that they have. the reforms in governance, they do affect more reducing european voice and increasing asian voice and also emerging economies. just to be clear on that. as i was listening to you mark and thank you for that excellent presentation, i was thinking about the juncture between the longer-term economic challenges and the immediate term because

those issues of imbalances sort of sit right there at the juncture of the two. some of the things that are needed to have strong sustainable talents to approach over time which is -- are also things they do for a stronger recovery. turning now to the gary litman the u.s. chamber, we heard in an earlier presentation discussion of trade and i would like you to pick up on that. i do remember at the economy summit that the leaders were bold in a straight way to say we finally acknowledge that delhi really is going poorly and we are not sure it's going to work out. so what they did was some truth telling as caroline alluded to. and now we have this interesting

dynamic with the pacific and atlantic, the ttp nt tip if i can keep those straight. what is your view on global trade talks and the regional trade talks and how they relate to one another? >> thank you david. i think it's important to discuss these issues in the context of where the private sector was at the moment of the crisis. frankly we were stuck. after the lehman brothers collapsed the corporate -- was in a state of shock. and we were excited to see the government and administration others being able to respond so quickly as indeed a premier forum to address the economic crisis.

companies represent trade all over the world but each market is seen as a particular market trying to develop their business in the growing market. from corporate leadership being able to respond so quickly, much faster than we were able to understand what were the roots of the crisis and how the global economy would evolve was a humbling experience. and i think g20 deserves a huge amount of credit. sending us a signal that we should do two things. we should try and regain the confidence of the regulators and policymakers but we know what we are doing. that we understand global risk. we understand our responsibility and capacity for regenerated growth and that we will play by

the new rules. second step was for us to in the private sector -- the business leaders we all got on the phone amongst ourselves which we didn't do before that. for of understanding of each other's capacities. we emulated in a way. we didn't have all 20 of us that we had but we have enough, 15 ceos and presidents of the largest organizations got together and we discussed how we can restore it the confidence in the markets and what do we think about the governments policy. and we started doing that on a gradual basis. we are still doing that. so by the time, i wanted to say festival, summit we were at a point where we were trying to be responsible, a responsible voice

for business and looking for ways that we could contribute the most to the restoration of the growth. that is why we pushed each of us in national governments and collectively, international institutions and g20 to pay attention to trade but not trade in a classical way of having more negotiations. our main concern was demand, where will it go, what structural reforms mean to -- and how will it be financed? the treasuries of companies, the financial experts of the investment conglomerates looked at their financial solutions. who is going to finance the infrastructure project?

where will the money go and how much will it cost? and what would be the way to reduce the risk? so, at that point our main request to policymakers was you know give us a signal. give us a signal of how trade will be financed in the future, where might he the next source and where we shouldn't expect much, and you know trade negotiations. let's not jettison that. trade was not a problem. trade and trade organizations and trade negotiations were the culprit. eventually as the acute phase of the crisis receded, we in the business community thought that okay, protectionism was contained. let's put it that way. or did not take the most egregious forms. now how can we contribute to the economic growth?

and while wto is important, we support the negotiations there, we need a quicker response and not a costly stimulus for the global economy. that's one of the reasons we all started supporting regional trade agreements. trying to put pressure on the government's to do it faster and to be more ambitious. it's an important way to stimulate our own interest in taking risk if we see that markets will be available. in st. petersburg in june we had another round of debates with corporate leaders and business federations on the dynamic regional agreements which were the negotiations in wto. debate philosophy, companies are thinking where my going to sell? we cannot wait forever for geneva so what we did, we collectively agreed to put

escher on regulators to focus on trade facilitation. trade facilitation meaning the movement of goods. remove the bottlenecks of customs and make sure we don't create we don't throw sand into the system and make sure customs show up in the process and make sure that nuisance regulations don't emerge at the borders. and wto has done enough in that area so we hope by the time of the bali meeting there would be some progress there. but it's not kind of an either/or situation. the wto is essential and with russian wto. we very much are interested in seeing how the large economy, huge economy, sixth largest in the world if you combined the e.u., will shape wto process and

bring the agenda there and help it move forward. but we cannot wait for ticket in times of economic doldrums i would say. >> i think that point about trade or tension as measures can't be stressed strongly enough. it is one of the unsung successes of the g20 because if you do compare today to the great depression of the 1930s clearly -- [inaudible] so there is a lot of critique made about the fact that there have been some protectionist measures in spite of the pledge to refrain from them. but there could have been a lot more to be sure. so thanks for that and i now want to turn to amanda sayegh from the australian embassy and for those who don't know the

reason. we are glad to have someone from me australian embassy. ms. sayegh is next up as the host of the 2014 summit and so we would like to hear from you amanda about the plans and some of the basics in terms of where and when the summit will be. we would also be interested to hear from you about how the troika has worked and the troika system for handing off between the past posts, host, current host and the next host and also many of us are aware and you all more so that there is an election coming up in australia and that has to in some ways complicate things at least in the immediate term. i can only imagine i guess that you know career professionals

and career officers like yourself of course are the ones in making sure the continuity is there and everything goes well. >> okay, let me start with i guess the logistical arrangements and things like that. we are well advanced by guess and preparations for hosting on that front. the government has already announced the time for the latest summit and that's going to take place in lisbon in november which is a great place to be. they announce there will be two meanings of g20 finance and the central bank government in february so quite early and intense in september in the lead-up to the summer and of course the prospect that finance ministers and central bank governors in the imf spring annual meetings which take places in september and october of that is required. australia is a long way for the

officials and ministers to travel so we do bear that in mind. we will have a very strong focus on consultation and i think that is evidenced by the fact that the government has already announced the domestic engagement groups, the business and civil society. i know richard has been part of that leadership team on australian has been active and engaging with other counterparts to gear up in to be in a position to ensure that they can feed into the wider g20 process so we will have a very strong focus on consultation and of course g20 members and nong20 members. and we all vary in -- are very mindful of promoting continuity

across host -- that is critical and groups effectiveness. particularly a lot of issues that are being talked about as caroline mentioned earlier, looking more to the chronic issues that may be obstacles to growth and things like that. these things can be multiyear and might not be able to be solved in a single year. the troika process is critical to that. we have been working closely with russia and with mexico. obviously the previous chair is part of that process and my counterparts are involved in that directly. i'm very happy with how that process is working. it's a very strong process and of course we will be engaging with turkey who are coming to the troika next year as well. so we put a lot of emphasis on

that. i guess on issues and topics is probably too premature at this stage to get too much into this data about how australia will approach its responsibilities in the g20 in and 2014. our immediate focus of course is working closely with the russians circa -- sure plan to finance teams. that is what we can do to set up the sound basis. that is the focus and what my colleagues are actively engaged in and the final set of objectives that were ultimately adopted will very much depend on where the current stream sent up at the end of the year. the government, present government has made it clear that the focus on creating jobs and lifting growth in russia of course his major priority for

its summit. it will be at key thing in 2014 as well. the imf's forecast for global growth in the projection and the projection for 2013 i think is 3.1% so the types of things that mark was speaking about earlier and looking at addressing our weak global growth and to high unemployment. these things are likely to be relative and persistent things as we move forward. the government has signaled that is likely to be a strong thing in 2014 and parts of the work streams that russia has made a priority this year and financing investment is critical to that. and a stronger growth in the private sector in particular and ways to address that will be part of that. the former treasurer who of course has been heavily engaged in the g20 process was a very

strong supporter of that work streams and engagement russia had put into it. the other area that the government has signaled is likely to continue and pick up as the work that russia, the u.k. in the oecd and others have been engaged in in profit shifting. ..

next week. he is very capable. minister. very experienced cabinet minister in the government and very familiar with treasury portfolio having been assistant treasurer in the past. you would expect a built of continuity with changes in finance minister there, having worked closely with government in its thinking around g 20 so many years. as a career public servant i should avoided speculating on any of those outcomes. the only thing i will say it tended to be the case in australia along both h both sides of the political parties there is a strong interest in the fundamental macro settings

and structural basis for economy of what's needed to support conditions for strong growth. neither side would have strong qualms with an agenda focused on lifting growth and creating jobs which is beneficial. so i would expect that, irrespective of the election australia's commitment to the g20 the focus we'll put on our host year and the like will still be there. >> thank you. what i should have made clear, turning to amanda in the first places that she is a finance ministries detailing to the embassy here. and picking up on your point about consultations, just to note quickly that gary has been quite involved in the b20, the business 20. talking about sort of a the

parallel process to the private sectors leaders to the g20 you were describing at the outset was just probably lose and self-driven but then has scene shape as the b20 as there is, there is the civil 20. there's the l20, labor 20. i myself am part of the think 20, which is, where pointy headed, pointy heads hang out. and so there is a lot, a lot to the g20 is not always visible to the naked eye. so, i would like to, since we, we have enough time to the session, we did really want to preserve enough for some q&a and to bring you into the conversation

i will open open the floor and please as before, wait for the microphone to come to you and be sure to identify yourself. >> my name is a noaa. i'm representing patton boggs. this would be best for treasury in terms of the t-tip and there are discrepancies between the european and american position. how do you see that playing out in the course of negotiations? >> i'm not a trade person and, you know, this is a g20 discussion. i think caroline's addressed some of your issues this morning >> do you want to? >> just, we had this conversation with our european partners in the private sector. difficult to imagine trade negotiations that would not

touch on financial services. this is the lifeblood of trade. now with the exception of prudential issues and issues that are address, and other bodies and, business community has learned a lesson from the crisis. keep your financial services providers very close to you. so we want negotiations to be as comprehensive as possible. >> there's another question here. >> hello. i'm don lee with "los angeles times." question for mr. sobel. i described the global rebalancing effort as discouraging. it was the pittsburgh summit where that effort or commitment was made. where has some progress been made? where has it really fallen short and what is the u.s. strategy to

advance that? and further, do you think that can be done without some sort of specific enforcement mechanism? >> thank you. you're quite correct that the pittsburgh summit we and the g20 advanced strong, sustainable and balanced growth. at the heart of the framework was the concept that the world needed to rebalance in a growth-friendly manner. so that end deficit, it was agreed deficit countries need to raise national saving and large surplus nations needed to boost domestic demand. and as well as pursue greater

exchange rate flexibility. there has been a good degree proving guess on rebalancing. you see this in the current account positions around the world. there are also has been progress in moving towards more markets determination of exchange rates. you see this in particular in our discussions with the chinese. i think there's a stronger consensus. there's a consensus around the need for greater exchange rate reforms in the g20 and we've been able to redraft the language and build a consensus around great market determination of exchange rates, enhanced flexibility, refraining

from competitive devalues -- devaluation and the like. what, you know, obviously the global economy has evolved and faced some different consults since, since pittsburgh and one of the key things that we've tried to emphasize, as we pursue the path of raising national savings that countries around the rest of the world boost domestic demand so that, as i mentioned, the u.s. would not be the importer of first and last resort and so, i think it is where we're looking forward, and we see the u.s. recovery moving

forward, you know, we are keenly interested in how the rest of the world will boost domestic demand. >> i was saying before that that there's a close positive relationship in some ways between longer term concerns and short-term concerns. that's, that's not quite always the case though, right? there has also been, i think, very much in the g20 when it is dealing with tradeoffs between longer-term concerns and immediate concerns so that when caroline was describing how absorbed the g20 has been with threats to the recovery from europe, that kind of does suck, suck up a lot of oxygen that could be going towards some of these, some of these other issues with longer time horizon.

i'm looking for a next question? i can always raise, thank you. >> thank you. "bloomberg news." i have a question for mark sobel as well about japan. please elaborate on your comments about the impact of current japanese policies dough mex i cannily and globally. , thank you. >> i think everybody wants to see a strong japanese economy. as you know mr. abe has put forward a program that rests on three arrows, monetary, fiscal and structural reforms. i think there's widespread consensus that a strong structural reforms are really crucial to boosting productivity

in japan and providing a strong foundation for durable growth to compliment the macroeconomic policy adjustments. we're very supportive of that. and what we have said is that, it's very important that, that ab bay-nomics operate through domestic demand and boosts internal domestic strength of the economy. that is our focus. and, you think there is widespread consensus inside japan and outside on that. >> sure. right there. it's coming.

there it is. >> [inaudible] this is anna from reuters. you mentioned a bit about global volatility and i was wondering if you see in what's going on in markets now a need for greater coordination and where that could come from? whether that is something you're worried about or will it solve that? thank you. >> so let me be very clear. i'm not commenting on monetary policy. that's exclusively within the fed's domain. you know, volatility has picked up and, i think we, we are in the united states we're doing what we can to strengthen our

economy, to improve our foundations. to raise growth and lower unemployment. and i think that, you know, others around the world have their agendas as well. europe is trying to build on its firewalls and put in place foundations for growth. and, we see efforts toward rebalancing in asia. so i think that, what we need to, to do is for people to come together, put in place frameworks that will achieve strong growth, to rebalance their economies. that's the strategy and the, i think that is the, best way to boost confidence in the global economy.

>> financing and investment has come up a couple of few times in our discussions so far. i wanted to highlight a couple more that we haven't focused as much on and wonder whether any of my colleagues can shed further light. that is twofold. it seems as if on the development agenda, g20, that financing, of infrastructure and infrastructure investment has been a major topic and, you know, whether it's a lot of potential payoff in growth from investing in infrastructure. the other is climate change financing which has a relatively new working group in the g20. i believe set up just last year. trying to figure out the right

relationship between public investment that will draw private investment behind and of course has a cross-linkage to the u.n. fccc negotiations where climate financing was a big piece of the, of the deal in copenhagen between emerging economies and established economies. so, as i say, those are both coming up in the g20 context and i wonder if anyone can add to them, what i've already described? >> if i might, david, the issue of long-term financing was one of the prime subjects of the discussions among private sector participants in g20 under the russian presidency. we had a separate task force organized, chaired by the risch shun director of the investment

fund and co-chaired by the u.s. chamber of commerce. most of the participants were long-term investors. growth fund, pension fund, who were describing the fact that, you know, the sufficient savings around the world -- fund alone is $1.3 trillion at least and growing. on the other hand there is a need to generate growth and jobs and returns so it's not like there is no need for infrastructure investment but there's a huge gap and in the time of the crisis and when the markets don't really function that well that gap needs to be somehow covered. the people with the savings, who manage the savings, are saying that there is not enough investable projects while people who promote, development,

promote projects, think that they can not figure out the access to the money that's out there in the insurance firms and asset managers, et cetera. so we spend a lot of time on discussing what could be done in that respect, what could be the private sector solution, or at least an indication of directions that a paper will be presented next week which will say that, you know, there needs to be a separate reflection stream that would include the world bank, ebrd, long-term investment fund and project promotion. one of the biggest disappointments frankly from the private sector point of view was when many countries introduced the stimulus but looking back we can not point to any major organization of our infrastructure that would be

associated with that money. the governments need to spend something quickly. we supported that. but what was on the shelf at that time, was, prisons and hospitals. we need to what are the right projects to finance. what are maybe the new asset classes. what should be changes in the accounting rules that would allow pension fund to underwrite projects. the russians suggested that we create an informal knowledge network. i think we will all want to stay engaged in that and that network will develop some suggestions for policy-makers including how to do two things, three things, actually. one, to measure the actual effectiveness of infrastructure investment. so you don't create, you know, the white elephants and airports nobody flies to. and then that create as constant maintenance, that become as

major problem. so how do you measure the effectiveness of return on investment? what changes need to be suggested in the accounting rules that would allow long-term investors to assume more of a risk? and third, how do you make sure that infrastructure that has been built connects countries, rather than just creates insulated markets, infrastructure that would actually help trade? so we want to think about that. we have help from some of the major consulting firms and we want to rely heavily on world bank, ebrd and the experience of others. on the climate finance, let's say when, when the subprime market, subprime mortgage market collapsed nobody thought that would mean also the collapse of support in spain three years

either. we need to figure out what climate finance means today. is it different than from generating growth? does it have to be a separate conversation with business? but it has to be a conversation with business. that is probably one lesson that we want to communicate to policy-makers. >> looking for anyone else who wants to come in. a couple of climate topics have come up in our discussion and i, we've just been talking about climate change finance. caroline talked earlier about the fossil fuel subsidy phaseouts, that is a little bit of a tongue-twister. i wanted to add another idea in the sort of you heard it here first category of something that, you know, might be good for the g20 or somewhere else to

get into and that is fuel efficiency in transportation vehicles. light duty, heavy-duty and, because, that is a sector that generates so much of the green house gas problems where technology adoption, you know, already has some momentum where regulations, you know, have an important role to play. and it sort of just struck me that, in a process like the g-20 as john hamre was describing earlier, that fuel economy and fuel efficiency standards could be, you know, something very helpful and could make a big

difference with green house gases. so i, sort of thought i would just throw that one out there. i know that we are supposed to be wrapping up shortly, given, very strict marching order for, from matt but we do have a few minutes left. >> i just wanted to come back to financing for investments. it is on the ministers agenda and say very briefly. we absolutely agree that long-term finance something crucial for, you know, allocating resources to investments and particularly infrastructure. the the financing for investment agenda i think also dovetails very nicely with the president's proposed rebuild american partnership to encourage greater private investment in america's infrastructure. we think to one of the keys mobilizing financing for

investment of course is to focus on domestic enabling environments. that's very important thing. there's also issues that are being discussed about facilitating greater supply of, facilitating intermediation of a global savings. and improving processes for planning and implementation and funding projects. the last point i wanted to make for financing for investment and the reason i spoke is the financing for investment agenda dovetails very nicely with i think what caroline said and i said and amanda said which is, our top priority is growth and jobs. and this is an important aspect of that discussion. >> thanks. either of you want to make some final remarks? please. >> i want to make just one

statement that, it has been an amazing source of political signals for the private sector and it's, in a way, we've learned a lot by trying to replicate it among companies, business federations and we learned how difficult it is to find consensus. how difficult it is to think globally all the time. so for us at g20, it is something we need support, we need to support very ernestly and bring our best ideas forward. we see its role frankly not in addressing collectively the chronic problems of individual markets. they are chronic for a reason and each of us works on them in air own -- our own economy and have been working together but as a source of assessment of

where are the next risks, systemically risks, global risks, what can the governments do together to mitigate them and to manage them and what can we as the private sector people supposedly generating the growth, the growth in jobs, whether we come in and fill in early on. just like we see the example of g20 setting up different working groups on long-term infrastructure finance. i believe germany and indonesia to be the lead. we want to lead early on in that process. not in a competitive sense, us against chinese or germans against brazil. no, we have learned the last four years the need to stick together to set aside competitive issues. we want to be part of that in terms of is of risk assessment and solution. you rely on those, we'll see the

benefit of that and we also think that we as a very vulnerable point still. there's a lot that needs to be done. we appreciate what's been done and we want to make sure you understand the business community, at least the larger companies are fully aware of the importance of imf and other international institutions and very supportive of continue those institutions. >> many of the conversations i've been involved with around the g20, talk in terms of, now, maybe we shouldn't be talking as if we are past the crisis. maybe we should be talking as if we are still, you know, in a later phase of the original crisis. i mean did you want to? >> you mentioned quickly the development agenda before and i point i make, it is hard to think we've been talking about financing of investment,

facilitation, strengthening integrity of tax bases. these are all issues that obviously developing countries have a strong interest in. while we often think about the g20 as having different work strains, there is a lot of potential for integration around the g20 issues and core agenda. it comes to where the russian ambassador started and caroline started, the looking a global forum, g20 bringing developed and developing countries for these type of discussions is really the appropriate forum for considering discussing and sharing views on these issues. >> well, those are all, i think very good benedictions for us to conclude on. please join me in thanking our panelists for an excellent discussion. [applause] and, matt good man tell you whether you get a break or not? >> no. no break. we have two minutes transition

we're going to call it. we're not going to call it a break. thank you again to all the panelists and david for taking on the moderator role. very much appreciate it. we got all the kind of nitty-gritty parts we need to know to understand what this g20 is all about. we appreciate everybody's participation. literally stay there we'll remic the next panel and then we'll get started. thanks.

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event. while we wait for the second panel to get underway. let's show you some of the beginning of the event with russian ambassador introduced to the event by the president of csis. >> thank you y'all for coming. surprised to not see people dripping. there has been a lost water here these days. this is important dialogue we'll have this morning. ii want to thank all of you for braving this here. there are two forms of internationalism. struck raul treaty-based internationalism and consensus internationalism. we all know about structural internationalism, places like the united nations, imf where countries spend time developing a framework, structure, and, it, it becomes one. dominant, certainly characterric of internationalism over the

last 60 years. the advantage of it of course it is normative. the next generation knows the things that are important because they have grown up with institutions that shape the debate but these institutions also become brittle over time and they don't work as well over time. so, there's a preference often with countries to use consensus-based international, coalitions of the willing. just find people that agree with you. let's go off and do it. the problem is, it is efficient but it is not normative. it doesn't really carry over to the next big problem. well this is what the international world -- >> thank you, again, for participating this morning on a wet friday morning. it's great to see a gadd group here still and again i know there are a lot of people watching online and welcome to you as well. i'm delighted to have on either side of me two people who individually would be a headline

maker here, talking about a lost issues but certainly about the g20. delighted to have both of them at the same time for a conversation about the g20 and what to look forward to in the next couple months up to the summit in st. petersburg. on my left is the second of two former bosses i alluded to earlier, when i introduced caroline. david lipton is first deputy managing director of the imf. he has been in that role for almost two years i think. david and i worked together at the white house and at treasury. he has a long, distinguished career in international finance and the private sector and at the imf in the u.s. treasury and in academia. i think he is actually pretty well-known figure here in washington and so, welcome to him. oh, i should have said he got his phd from an obscure institution in cambridge, massachusetts. because that is a lead-in to our

other speaker, can send yaw yudaeva is the, g20 sherpa, as big responsibility as russia hosts. chief of the president's expert directorate and first office of the russian president. kseenia has been there a year and scene on the organizing the st. petersburg summit and many related aspects of a hosting year in the g20. she, prior to her government service again has a long distinguished career in international economics including as chief economist at fairbank and she also worked at the -- [inaudible] washington think tank in the moscow office of the carnegie endowment and in addition to, degrees from moscow state university and the new economics school she also again has a phd from another obscure institution in cambridge, mass, which you can read about in the

biography here. delighted to have them both here. we'll go through the g20 agenda, starting with a core three pillars that were just talked about the in the last panel. we'll let's do them one by one. macro growth, global growth story. i wanted to ask, david, you just, the imf just issued an update of its regular annual world economic outlook just this week you downgrade the outlook for the global economy. when i look the at release, one thing streeted out as a difference. back in april you were pretty positive about conditions in emerging markets. you even had a headline in the summary of the said reaccelerating activity in emerging markets and developing economies. what happened?

>> let me say a couple things about the g20. i think the g20 as a group, it started with the washington meeting in 2008 and through the london summit and the pittsburgh summit in 2009, it really addressed the question, how do we stop this crisis in the midst of a financial crisis and how do we make sure it never happens again? i think in the work that the g20 has done over the years we've seen very good cooperation among the g20 to, deal with the most acute phases of the crisis but we're now faced with the fact that recovery is disappointing and has never really taken hold as strongly as we would like. yes, we have, in our most recent outlook downgraded growth a little bit. we have been saying for some

time with growth with most rapid growth in emerging markets with recovery but not strong enough recovery in the u.s. and a few other countries and still quite disappointing situation in europe where where the eurozone remains in recession. i think, matt, you're absolutely right, one of the more substantial revision this is time has been that the emerging market world has slowed somewhat. now to keep it in perspective it's still the fastest growing part of the world and it's always hard to gauge exactly how high growth can be for how long in the emerging market world but i think we are seeing some slowdown and we're looking at the reasons for that. but we also downgraded growth in other parts of the world, in essence everywhere except japan. we downgraded growth at least a little bit but again keeping this all in perspective but i

think the main point i would want you to takeaway is that growth has slowed somewhat in the latter part of last year and the first part of this year. we see it accelerating a bit, with some recovery this year and into next year but we see growth as remaining sufficiently strong to deal with challenge of create jobs at a pace that will allow countries to reduce unemployment rates satisfactorily and coming back to our subject of the day i think what that means is there is an important role for the g20 which has of course countries from each of the country categories, advanced, emerging, different regional distributions. each of the countries in the g20 to play a part to work together in the g20 to try to find ways

through collective action to contribute to a stronger recovery and we have been speaking about that for some time and we'll continue to take it up in this g20 -- >> i do want to come back as sort after policy response but in the outlook itself you sort of mentioned europe, i sort of again see a schizophrenia about europe. on the one hand in the april release you seemed palpably relieved as the euro area is not about to break up and this time, you know, you expressed and you just did again that europe is not performing well enough but you show it accelerating or turning from recession to positive growth fairly substantially over the next 18 months. how should we think about europe? it has been a major subject of the g20's focus in the last 18 months, two years. >> europe has been afflicted by crisis. it has taken a number of important decisions. europewide decisions, individual country decisions that have

greatly reduced the risk, the tail risks of quite acute crisis but we still see recession and we still see very significant problems in peripheral countries and not, and a weakening of growth in the core countries. so when we go through this we don't see any, unfortunately you don't see a single silver bullet. not as though there is one policy pedal thaw push and growth is restored. rather, our recipe include seeking action, policy action on every margin where there is some room to provide help and that is we believe stronger monetary policy accommodation is necessary. that we've seen a kind of a banking fragment operation -- fragmentation across europe and a failure of banks to provide credit that is supportive of

recovery. and so we think there's work for the ecb, the european central bank and others in europe, to try to work on improving the channels of transmission so that monetary policy provides an impulse and that is felt more broadly. we see a job for continued fiscal adjustment but adjustment at a pace that determined country by country where countries that really need to adjust quickly do so but countries that have some elbow room to provide support for their economies do that. and a range of structural reforms that can be supportive of growth in raising potential growth overtime. and lastly we see an important role for improving some of the architecture of europe itself. it's been, in a sense, an imperfect currency zone and economic union. it's a, it's a single market for goods but it's been in the european union, 2markets for banks with individual

supervisors. we've been pushing, among other things, banking union, with a whole set of steps that we think will help improve the functioning of the banks and capital markets in europe, and provide some impetus for growth. i think that agenda, it certainly has been taken up. i think that agenda is progressing and on the presumption that monetary policy will provide some more accommodation and that plans for banking union and some of the fictions to the architecture go forward. on that basis we see some recovery in europe in the coming year. >> okay let me bring ksenia in the conversation. before we talk about your role in the g20 economy, as a russian economist, russia is doing reasonably well. as the ambassador indicated you're debt-free. you have not many of the problems that many other countries we're talking about today here have. first of all, what is sort of the outlook for russia?

but more broadly when you look out on the world what do you see and what do you worry about in terms of macro operation picture? >> russia is doingea well, i agree with you. russia only concern is the global economy and russian economy an here because russia growth has slowed down both aftate but this year in particularly. and we believe that this is largely a result of several global tendencies, including recession in europe and slowdown in some major european countries and including a slowdown in russia. so the global growth slowdown we predict is a challenge for russia as well and other g20 economies. this is why it is important for our economies to discuss this issue and maybe come up with

some ideas how we're going to address this issue, how we're going to move forward. let me say a couple word personally to comment rather than a government official. the world went through several things after the crisis. a huge decline into 08. we know it was a result of the financial meltdown. then there was some recovery which was also in some countries fueled by extensive monetary and fiscal policies but now it looks like the world is going through the structural adjustments which we all knew there were supposed to happen before we made it to the balance growth stage. i was thinking about, china and

both the u.s. for example, need to go through some structural adjustments in order to get out of this deficit between the two countries, right? and i think that, there are, some adjustments have been made by it united states and china is starting to go through these adjustments. right now they are not using anymore of the same tools which they used to use back into 09 to support growth. they are going through the thinking stage. but these structural adjustments in china will have to be, probably requires structural adjustments in other countries too. this is the stage where the world is getting into. one more issue which was quite present on the agenda only for the last month is the exit strategies and in fact also the

exit policies, exit from monetary policies on other countries. russia as well as most of the g20 countries experienced a significant financial market volatility after some rumors that the united states and our federal reserve is going to scale down the issuance of government bonds, right? i think that the impression was as soon as the crisis will be over, central banks will be able to scale down their non-traditional policy, the financial sector will be less volatile, right? the last months have proved to all of us while authorities -- for a number about years to come, even after growth will

stablize but because central banks will have to get out of the non-traditional policies, right? so it is also, something which needs to do with actions by many central ministers and central banks of g20 countries where they would like to approach this volatility, right, it is a big issue which is back, which is on the agenda right now. >> but i want to ask david about exit strategies. if i don't, i'm sure somebody in the audience is going to but let me take this back up to the g20 level again and say, it is interesting you talk about rebalancing but, sort of feels as though the pittsburgh framework which, you know had those three big adjectives, strong, sustained and balanced growth, the talk about the framework itself and about the mutual assessment process under the framework, you don't hear sort of as much discussion of

that. does that mean because, you know, we sort of solved the problem? we don't need the math? or am i mischaracterizing where we are in that? what role does the g20 and those, the framework and the map play in addressing these? >> i think you asked a very important question. as i said before, i think our premise is that there is need for more growth virtually everywhere and there is no single bullet. tough look at every margin. global rebalancing is one of those margins and there's been, i think, some, complacency that's set in because global imbalances have gone down somewhat. if you look at chinese surplus, it was eight, nine, 10%. now it is 2 1/2, 3%. you can look at other imbalances around the world, they have gone down somewhat, but the question is, whether those imbalances have gone down because of rebalancing or because the

economy's slowed and, exporters aren't exporters. importers aren't importing. i think we're going to find that imbalances are diminished but not in a permanent way and that there really is still work to be done to promote, rebalancing and that can be a significant contributor to strengthening global growth. now what i think we need is a g20 process of pier review. something that the g20's talked about, really from its inception but hasn't made enough of. and i hope that, as this russian presidency goes on and this one visiter wally finished with the leaders summit coming up in september but as we move into the australian presidency that follows then we can have a process where the g20 sits down

together and have a more serious pier review and not a general one. -- peer review. they can talk ernestly what others can do to make a contribution. perhaps in that way, through that dialogue, reach some agreement on collective action that would be useful for everybody. >> that sound like a good idea. i mean this is a group of the main economies in the world and they are peers and they have an opportunity to review. ksenia, will this be part of the russian agenda in st. petersburg and how are you framing the macro discussion? i want to specifically as a follow-up ask you about your financing for investment category which is under your theme of growth and jobs. >> actually right now we started to discuss, caroline i think in the morning told you that we had a meeting in the morning. we're going to talk about the discussion of macro issues on

the economy itself. clearly the leaders -- topics which we're discussing now only but i think that the process which david is speaking about is the process so-called group or which, does, it is -- [inaudible] not sure that everybody here in the audience is familiar with how the g20 is organized? >> no, actually. >> let me tell you. it was for me as newcomers with g20 real liance how big it is, g20 and how many different persons are involved and how it works. the g20 of course has, everybody knows about leaders summit, right? leaders summit happens once a year and the in preparation for the summit and ministers of finance process. they prepare meetings of the minutes of ministers of finance

and central bankers themselves and also prepare the financial part for the leaders summit. apart from that on many issues which are only on the agenda there is official working group or task forces where experts from different countryies which discuss specific issues in more details. so there is this expert level discussion which reports, either to sherpas or financial ministers and then from financial ministers and sherpas we report to the presidents. it's a multilayer process. and the discussion group within the financial track which is called the framework, for sustainable and balanced growth, i think when david says that countries need to sit with its pierce and discuss what's going on -- peers, largely supposed to

have the inside the group. i don't think that leaders have enough time for such as this discussion. i think it is also to be on the working level and it's actually happens to some extent during those framework, or, meetings. maybe not as, as we, it was perceived from the beginning. but actually david has talked on third quarter issue because of the very beginning there was a controversy of the role of the imf and the role of the framework itself because it was the imf who did the review for g20 and still doing, still doing it. and the framework is doing it

self on the separation of obligation between the imf and the framework group is interesting issue to discuss as well. but anyway, there is this group, working group discussion level that sherpas have with financial ministers and are like, one of the things which i learned during this process about what the g20 is doing, g20 is a where you have all the different countries sitting around the table discussing issues on different levels and until, we are in the so-called multipolar world. so we have a lot of distrust, misunderstanding, different views on different countries on different levels and i think that are g20 provides the forum for the dialogue and for bringing together the, for building trust in one countryies

and i think this sun with of the issues we need to understand. in my role as a sherpa i'm permanently asked the question is the g20 sufficient or not sufficient. whether it was -- [inaudible] right now, or, and think that, this is really the issue about on trust between countries with each other because our, well, we're probably not [inaudible] some countries still may believe that the benefit, others benefit more from some policies than them. and, building trust through the discussion is an important task for the g 20 as well. this is one of issues where this -- >> i personally agree very much the habits of cooperation being built on the g20 is one of its real assets and something that

people underestimate the importance of but it is actually quite important to get this group of countries, haven't had these conversations before, and, maybe don't have the full amount of trust. i do want to come back to the institutional questions but we have a lot to cover. let me move on, one more question about macro sort of side of things, david. there's been a lot of angst in the world about recently, about competitive exchange rates, depreciations and, yet, the imf seems to take a relatively benign view of this. and, you've been criticized for being not vigilant enough and not outspoken enough about these issues. the whole establishment of the imf was to address this set of issues. how do you respond to that criticism, if it is fair and if it exists? >> we've been asked by the g20, by our whole membership to look how policies in any one country spill over and affect other countries and we're doing that and i think when we look at that

in the recent period we've identified those spillovers and we're on, in a sense on the lookout for policies that are misguided apcausing problems or potential problems. most of the focus in early part of this year was on the unconventional monetary policies that a number of central banks in different ways and at different times, u.s., u.k., european central bank and bank of japan have been carrying out. when we look at those policies we see that the, we see the clear rationale that central banks have for these policies in a setting where economies are sluggish, inflation is falling and it is below targeted levels. interest rates have already been reduced to zero. so the central banks haven't any, very much conventional monetary policy instrumentation

left. and at a time when fist can policy room for manuever is limited by high-def sits and high debt. unconventional monetary policies have actually made at various points contributions, stablizing markets that have become non-liquid or non-functional or supporting a modicum of economic recovery. we start by recognizing that when countries are pursuing important domestic objectives with important benefits, and we see benefits coming from unconventional monetary policy, that has to be their core consideration. now of course, there can be negative spillovers from policies pursued for good reasons and with good results and we've looked around at that. but we've not in general, we've not seen the two things you would look for.

. . 27 our results are pretty much as i just said. but if anything, the situation has slipped not only the other way around where what countries were concerned about earlier in

the year is that this liquidity was leading to the capitol flow and the countries and was causing their exchange rates to lose competitiveness and threatening their growth. but of course, with the discussion and the attention now what about whether or not the fed is going to start to taper the methods and diminish the amount of the unconventional monetary policy what we are seeing is quite the opposite. we see the capitol flowing out of emerging market countries and the currency weakening. and the concern has really changed. now in this episode, and again, we are being asked to look at this process, to assess the ways in which the markets are reacting to what the fed has been doing and saying. and that's something we take

into account as we give our advice to the emerging market countries about how to respond. so, we will be involved in the process sounds well. >> if you want to comment on that i wanted to move on to talk about financial regulation. okay, so mark was up here earlier and gave a good overview of the extensive paray of what should be done through the board and the capital requirements and systemically important financial institutions. what do you see as the main gaps in this area and what is russia concerned about and what do they want to do this year to advance the international financial regulatory agenda? >> well, from what i know from the very beginning, yes there

are lots of discussions on the major american regulation and the loss of concerns with that. this includes some other areas and has been a concern for many countries. to some extent russia, but this is the issue which everybody is discussing. i think that we still need to come up with a solution reporting agency on both

markets. but the agenda -- [inaudible] there is a lot of discussion about whether it should be introduced now or the introduction should be delayed because of the concentrations and we have the same discussion in russia for example. the bank was introduced by the same in october. but right now we are hearing from the central bank that it is to conversations with the banking community's. they've decided but i think that it will introduce not at the

very beginning that sometime later. >> i'm conscious of time and i want to give the audience enough time and have two other topic areas unless you are burning to say something i'm going to ask a question about the third big area which is the form of the international financial architecture, which again, was talked about in the last round, which initially was focused on reallocating shares in the international financial institutions like the world bank and imf to reflect the shift in the gravity of the economy especially the large emerging countries. and i noticed that you characterized this whole area and discussed the transparency. why, what does that mean and what do you hope to get done? >> it is the priority -- our approach this year was sent to

introduce, trying not to introduce new topics were discussions because there are very many issues on the table. but we introduced the several principles for which we look at all of the existing areas already and transparency is one of them. as an example, what we do in the energy area for example support for a number of years the collection on data production and so forth on oil and gas. last year it was market participants and they discussed with them how they use the data,

whether they would use them at all. what do they think is -- how this can be improved to be more useful for the market participants. and actually, we learned quite a lot after the seminar because we were told that information about the financial direction right now is as important as information on the final users and producers because of the commodity markets, almost immediately the financial players became so big that they could dramatically change the situation on the market. the existence needs to be taken into account in order to

understand how the markets are going to move. and i think this is one of the areas now we are looking for practical solutions, one of the solutions which was the seminar is to improve the transparency in order to change the situation so this is just one of the examples of transparency in order to improve them and come up with practical solutions. >> david come on the original sort of purpose of this topic, which was again, to sort of shift the balance of power away. have the united states and other economies hurt themselves and the effectiveness of the imf by dragging their feet on some of these? >> i think it's important if the world as we call on the imf to fight the crisis and deal with the new problems the world faces

the imf has to have legitimacy and it can't be viewed as the pawn of any one country or group of countries. the world is changing with rapid growth of emerging market countries. the changes in economic importance have to be reflected in the government structure throughout the whole spectrum which you might want to deal with that. so, they're had been changes in our government structure and changes in our code of system and the way that our executive boards and government work but there have not yet many enough. we have been informed they have been decided in 2010 and approved by many countries but not yet approved by the united states of america. i think that it is quite clear that the imf serves an important

role in promoting global financial stability and global growth. that is something that is good for all the members and in particular good for the united states for the united states to stand behind the imf as an institution. and i know that there is legislation being considered right now to put forward the increase in the government reform that had been proposed and adopted in many countries and i hope it will go through. it's very hard to see how our role can continue as it needs to unless our government is as modern as the global economy. >> ksenia, but to give you an opportunity before we go to the audience to talk about the rest

of the agenda. you talk about energy. there street, anti-corruption, government. you want to quickly summarize what russia wants to get done in some of those areas? >> okay. on the trade we feel we are trying to build consensus and also, we came up with a proposal of establishing some principles of transparency which is completely in line with the government process and it's important in this work when you have the principles on transparency. then in the development area, this is an important year

because the involvement was put on the agenda and most of the time it was supposed to be completed by the end of this year. so the development, and we are going through to exercise his to get one of them is an accountability exercise. and i know i have been all around the area to fulfill this and another one as preparation of the building block. they've come up with some specific language but the exact word right now is something else. but anyway, so we are developing

these and the new plan on development. let me say one more thing. it will be five years this year. so, this means the accountability exercise war is becoming more and more important and we are doing it this year it is in development and in the framework. and some other groups are doing similar exercises. the labor group is doing what we call correctional exercise of the labor markets and in the different countries this accountability will become more important in the years to come. >> one final question. i can't resist. i'm guessing based on having had experience in this myself that you have had a tough year and i

wonder if whether your view on the g-20 should have a secretary at to help with this has changed at all or evolved during that year and what advice would you give the australians going forward? >> well, i had such a good team. >> good job. >> they organize as well, so the positive side having to work on that, and my advice is also to try to get good people. they are preparing what we are

doing almost from the very beginning. we had a very good conduct with australians on the practical issues. >> we heard a little from amanda earlier about the planning and i'm sure they will do a great job. by the way, working with the next post and the last is an important and a useful part of the management and the important institution. okay. i'm going to open up to questions. we have 15 or 20 minutes. if you have a question raise your hand. wait for the microphone and identify yourself and please ask a question. >> my question is for ms. ms. yuaeva. specifically for russia and other countries in the g-20. >> well, you know, as a member

of the present administration, i am trying to minimize my comments. we think there are too many rumors about the dependence on the government and the present administration. and it's actually in the play more independent when people resist and this is why i would not comment. >> you are following a good tradition because you have all declined to comment, very smart. david, do you want to say anything? >> i just want to make a general point. first, to say that you can't answer your questions as a general matter. monetary policy and the lack of policy as a whole has to be tailored to the circumstances of individual countries and there are some that have economic lack

-- flack that have on employment that is a different situation than say in russia today and unemployment is at an all-time low in russia. russia faces the question is the growth low because the demand is low from the rest of the world? or is growth low because it is really not profitable enough to invest? and we just had our annual policy dialogue with russia. not speaking about monetary policy per say, but about the posture of the demand management i think russia essentially adds full employment. it has the low unemployment rate, it has little slack in the industry. and it's going to be hard for russia to boost growth very much in demand. it might get a little for a while. but it would be at the cost of

pushing up inflation, probably pushing down the currency. and that actually going the wrong direction from the standpoint of creating an environment in which there could be more investment and more growth. russia has investments between 20 to 22% of gdp. it's been growing in the neighborhood of 3% and it aspires to grow in the neighborhood of 5%. to do that, it needs to have investment in the neighborhood of 25%, investment is 25% of gdp. to do that it needs to put its focus principally on creating an environment in which there can be more business, more investment, and in time -- >> david speaks a great authority on this part of the world. he got his policies in the former soviet union and eastern europe say you should listen carefully what he has to say about that subject.

okay. next question. >> i'm a trade lawyer so i ask this question with great humility. but the idea of the peer review that the david lipton mengin this very attractive to a find understood correctly, ms. yuaeva said well, this sort of happens at the expert level. even if that is true, perhaps we all agree instinctively that behind david's suggestion is the idea if they are to move the world economy and the right direction their need to be at least some components of this kind of discipline that appears you might produce. >> you have seen a lot at the imf. so i am wondering what you would add to your suggestion that it's closed politically, realistic and the allied of the review you think might most move in a

common direction. >> first there was peer review and collective actions in washington at the first g20. then in 2009 at the london summit and pittsburgh. they had good discussions they took and they make a market thinking about the trajectory of the global economy. i reviewed at the start at the expert level but can't finish at the expert level. there are certainly -- obviously the leaders aren't going to sit around and talk about the details of this, but it needs to start at the expert level to be discussed by the finance ministers. and then when there is a plan, the leaders in part political impotence by reviewing with the

finance minister suggested and making a commitment. so i see it as a process. and as you said, we have a peer review at the imf. that is what we are all about so it is only natural that we would propose that this take place in other forms. what we do with our members at the executive board. i think that the g-20 is special because it is the only forum where leaders from the country representing about 85% of the gdp fit together. so this could operate in the way that i described, and the leaders take commitments i think those could be meaningful commitments and the markets quite convincing. >> somebody over there. did you have a question?

>> i want to ask a general question, not russia specifically but more generally about emerging market slowdown and the bricks generally suffering the gdp down the revision in the financial market corrections. how does that affect some of the plans for let's say the brank development bank or cross investment through their respective sovereign funds or are those ambitions still priorities and how do you reconcile that with the g20 process? in the upcoming summit in the future? >> well, for me on the agenda there is a lot of going on about the specifics of the instrument because there are two on the table. one of them is the development

banks and the other one is the pool. so this is i think an equivalent to the imf. it's a share of responsibilities. and now there's a discussion. i think all countries generally support but now they describe how to instruct these institutions. >> i thought that i saw somebody in the back quadrant. other questions okay. >> a question for ms. yuaeva. can you say what the top three outcomes or agreements the russian presidency would like to

see? >> well, i think what we would like to see first of all is a discussion on the global economy. but some practical things that we discussed about some commitments and the commitments on the financial strategies, but also we are going to have the ministers of finance meeting next week we also hope they will be able to come up with a joint statement which would reconcile the support of economic growth and unemployment on the one hand then on and trade i already said

the extension is for the transparency. and the energy -- we are launching a website of the global marine deduction. this is the site where there is information on the regulation of our energy exploration and transportation and the marine environment and coastal areas will take place and some other small initiatives in this area. then in the development we are coming up with a new plant. one idea that we would like to offer this audience, this is the idea that was suggested to us.

the draft is to remain the framework of on the sustainable growth into the framework for the balanced sustainable growth and with the discussion what we should do or not and that is a question for the audience. >> they need to take on issues of inequality. >> okay. interesting. >> there is something i meant to ask you before. you're the creation on the g-20 work fossil fuel and now they are taking a stand on that as well. do you want to talk about your thinking on that and how it has moved forward and what more can be done? >> we did a paper in march of this year that quantified the impact of the fossil fuel

subsidies showing that there were very large debilitating the budget balanced and the fiscal sustainability but a number of countries, especially countries in the middle east and countries in africa and that the lack of taking action on the externalities' meaning energy pricing that doesn't take into account pollution, congestion and the effect on climate change. but these were very substantial in the united states and others advanced economies. our view is that addressing energy subsidies would bring very substantial benefits across the globe. and we are working with our member countries to take action on the energy subsidy. it is often a politically very

sensitive subject whether you are talking about subsidies and developing countries or the lack of treating the externalities' an advanced economy is coming and we understand that but we think it's important enough that this ought to move from discussions to actions. the g-20 took a commitment in pittsburgh in 2009 to eliminate fossil fuel subsidies over the medium term and i think it has arrived and it's time to get on with it. i predict that they won't and that we will see more action eliminating fossil fuel subsidies in the developing countries where they really need to do it in order to have enough resources to take care of their people to provide education spending infrastructure spending and i think we will see more action their pet certainly as an institution, we are encouraging

all countries to take action, to plan and take action on reducing energy subsidies. >> the last two responses. it's important in talking about these issues and if we talk about the inclusive growth and inequality, note in the fossil fuels case, david mentioned the political sensitivity but the reality is that a lot of the subsidies are going to the middle-income people, not to the poorest in the societies and so, you know, i think there are some real issues and one needs to look at this in fact based way. any other questions from the audience? one or two final ones. again. i can't see everybody. but -- okay. we in the upper right on time so that's perfect. let me thank both of the panelists for joining us up here. [applause] let me say on behalf of